Get your Illinois property tax credit

Be Sure To Get Your Full Illinois Property Tax Credit When Selling A Home

I just filed my Illinois income tax return and, when looking it over, realized that I had almost missed an opportunity to get my full property tax credit for the home I sold last year. Calculating the Illinois property tax credit when a home is sold is a little tricky because normally you would take a credit in 2022 for the 2021 property taxes that you paid to the county in 2022. However, depending on when the property taxes are actually paid to Cook County and when the home is sold, the taxes paid to the county might not actually be paid directly by the seller. The seller might pay all or a portion of them to the buyer at closing, who then later pays the county. In addition, the seller pays the buyer for the portion of the current year taxes attributable to the period during which the seller lived in the home. Those property taxes won’t be billed to the buyer until the following year.

Now, before I go further I need to point out that I am not a tax professional and you are advised to seek the counsel of a tax professional on these matters but I’m going to give you my amateur assessment. Check out what the Illinois Department of Revenue says on their Web site: “You may figure a credit for Illinois property you sold in 2022 by combining the 2021 property tax paid in 2022, as well as a portion of the 2022 tax paid based on the time you owned and lived at the property during 2022.” The way I read that your 2022 tax credit should be based on anything you paid directly to the county PLUS any property tax proration you paid to the buyer at closing. I never really thought about this until I sold my own home.